The financial industry must contribute to the funding of generic advice and the Government is looking at moving towards matching industry contributions, says Treasury Economic Secretary Kitty Ussher.
At an Investment Management Association fringe event at the Labour party conference last week, Ussher said if the concept of generic advice succeeds, then everyone will benefit so it is only fair that everyone contributes to the cost.
She told delegates that any potential scheme, which could cost around 100m, is unlikely to succeed if it is only backed by a few industry players and the Government will not help fund something that does not have industry backing.
She said: “We are only going to do our bit in conjunction with the industry. At some point in the next few months we are going to have to have quite serious negotiations with the industry. It will be a partnership.
“We have not made the budget decision yet but there is an expectation that we are doing this together. We cannot just have a few firms contributing, everyone must get involved, everyone must contribute.”
Ussher expressed this sentiment at an earlier Axa fringe meeting, saying she would like to move towards matched funding between Government and industry although this will depend on budget allowances.
She also suggested that generic is the wrong word to use for the scheme as it is too “jargonistic” and a more suitable phrase should be found.
She said Otto Thoresen, who is leading the Treasury’s generic advice review, will set out his preliminary findings to the Treasury next month before producing a full report by the spring.
The Government is likely to respond in next year’s Budget as the deadline for getting the scheme up and running is tight due to the introduction of personal accounts in 2012, as well as changes to the industry landscape caused by the retail distribution review.